IT + Marketing: Innovation Through Collaboration in B2B Software Companies

I’ve read a lot of articles and posts that have discussed various aspects of the uneasy relationship (in many cases) between IT groups and Marketing groups. The people and process side of this ongoing situation puts me in mind of the obstacles and needs for the adoption of a collaboration culture in software companies. For the purpose of this article, collaboration means: talking to each other, listening to each other, analyzing and planning in concert, presence of mutual respect – no silos, no turf wars.

I’ve read a lot of articles and posts that have discussed various aspects of the uneasy relationship (in many cases) between IT groups and Marketing groups. The people and process side of this ongoing situation puts me in mind of the obstacles and needs for the adoption of a collaboration culture in software companies. For the purpose of this article, collaboration means: talking to each other, listening to each other, analyzing and planning in concert, presence of mutual respect – no silos, no turf wars. Good intent, good communication — bi-directional and legitimate. The kind of enterprise collaboration where teams work together for common cause: business success, growth, innovation, getting the work done well.

Whether it’s dubbed “IT working with Marketing”, or “Enterprise Collaboration”, upper management has the same responsibility to encourage and sponsor all types of necessary and differentiating collaboration to achieve business goals in ways that are better, faster, and smoother. Unfortunately for many software companies, upper management is not stepping up to enable and empower useful collaborations, particularly cross-departmental. Upper management in this context means CEO, CFO, COO — all too often, the CIO and the CMO are not accorded power over the decisions coming from these other roles.

Ben Horowitz on the ‘Innovation Business’:

The technology business is fundamentally the innovation business. Etymologically, the word technology means “a better way of doing things.” As a result, innovation is the core competency for technology companies. Technology companies are born because they create a better way of doing things. Eventually, someone else will come up with a better way. Therefore, if a technology company ceases to innovate, it will die.

Collaboration frequently is a very good way for software company teams to not only work for company success, but to better innovate. Innovation in software companies should not only be about products and solutions; it should be about how the company itself works as a thriving and growing organism, how it empowers staff to be successful on the company’s behalf.

Neither IT Nor Marketing Is A Monolithic Being Calling Its Own Shots…

Contrary to popular belief, the “modern” IT group did not spring up fully formed as an autonomous entity that makes decisions in a vacuum. Obviously an exaggeration, but I think a lot of people have this notion in the back of their minds when considering the role of IT. With a startup, the IT team may be more focused on digital infrastructure: hardware, telephony, internet, internal systems. As the company grows and different kinds of employees are added, IT grows too. If the software company IPOs, then the IT group is heavily involved in compliance, security, ensuring always-on performance, and so on. Internal systems may become more complex and numerous, employees more virtual, hardware and infrastructure demands more sophisticated.

Frequently the result is that IT groups become silo’d, but usually not by their own design. Upper management sets the agenda for IT groups and usually holds responsibility for the positioning of IT as separate from the rest of the company. In recent years, most IT groups have suffered through significant staff cuts while more has been piled on the remaining staff. Upper management then expects instant change from IT to better support the business — without sufficient resources – and particularly without a strong collaboration culture in place.

Marketing groups are in the same boat as IT regarding who decides their destinies. Software companies in startup mode have a history of adding Marketing functions in haphazard fashion. Many startups still look at “marketing” as something to slap on when the sales team needs more help finding buyers. The reality is that for most software companies, Marketing is an important component of the Business, just as IT is. But too often, upper management misses the strategic opportunities to do it right – to build teams working together, instead of separately and frequently in conflict.

Strategy, Business and Tech

IT has been the target over past several years in companies that rightfully want IT to be more aligned with the strategic needs of the business. IT has received black marks for not moving quickly, not feeding innovation, and so on. Balance this criticism of IT with the reality that upper management usually has a big hand in the current state of IT affairs.

Eric Brown frequently addresses the future of IT with a strong dose of reality:

What’s missing in most of the articles I’ve run across about reinventing IT or changing IT is the effect the Business has had on IT. You can’t really reinvent or change something unless you know the how and why behind the creation of that entity in the first place.

…at the end of the year, the grades are handed out. Sometimes IT fails. Sometimes IT over-achieves. …most times, IT gets a barely passing grade.

Is this barely passing grade (or failing grade) due to incompetence or mismanagement? Most times it’s not…most times it’s due to changing priorities that aren’t clearly thought through and/or communicated throughout the organization

And who creates the constantly changing priorities? Upper management.

Harvard Business Review also weighs in on the future of IT:

The authority and responsibility for IT-enabled business outcomes needs to be aligned. The CIO’s dilemma…is the challenge of promoting innovation while increasing efficiency. IT is in the untenable position of being held responsible for this even though their business partners control the decisions that impact their ability to do so.

IT governance is really business governance. In many organizations, IT has led the way in implementing governance over critical decisions related to strategy, business architecture, investments, change, programs, risk and sourcing. Over time, organizations have realized that decisions in these areas need to be coordinated across the enterprise and have elevated and consolidated these activities outside and above IT.

This isn’t your grandmother’s technology. “Technologies for collaboration, business intelligence, and customer interface all require experimentation and iteration” and a hands-on relationship between workers and their technology. Increasingly, the technology necessary to assemble, deploy and operate technology will be provisioned by external providers freeing up internal IT resources to focus on the meaty issues of coaching users on how to exploit the technology and ensure horizontal integration, security, continuity, and performance across the extended enterprise.

Marketing + IT <> Business + Tech

For many B2B software companies, Customers are now Buyers, many of whom want to drive the relationship and buying cycle, moving sharply away from the former sales-team-focused cycles. The customer experience with the company has gained importance; many company-centric processes must give over to processes with a strong customer focus. Both Marketing and IT have important roles in customer engagement, with marketing technology growing in sophistication and variety. But in most companies the IT group carries the additional responsibility of working with multiple disparate internal constituencies, with priorities determined by project portfolio management, internal politics, and by decisions from upper management.

When IT resources are not easily available to support time-sensitive initiatives, marketing groups have frequently implemented their own technology solutions as a form of Shadow IT. New approaches to effective customer engagement lean heavily on cloud/SaaS based technologies that are fast to set up and use by non-IT staff. Unfortunately a significant side effect of not including the IT group has led to problems: new data silos, separate operations and analytics – lack of integration with other systems in the company.

As cited in a recent post by Cheryl Burgess, the current and frequent state of finger-pointing and lack of mutual respect between IT and Marketing is summed up by Chris Murphy of InformationWeek:

IT sees marketing as looking for shortcuts, shortcuts that will come back to bite the organization. Marketing, meanwhile, sees IT slowing them down, not delivering on the operational basics, and not understanding marketing needs.

Burgess also points to an Accenture-sponsored study involving over 300 CMO’s and 300 CIO’s that presented this view of Marketing + IT:

The CMO Council believes there is a global imperative for marketing and IT organizations, which too often have been polarized and adversarial, to find common ground around the business of innovating more efficient, effective and measurable ways to target, acquire and stay intimately connected to customers. The need for greater synchronization, partnership and collaboration between these two groups has never been more critical to their mutual success.

The Marketing Technologist: Success More Likely With IT and Marketing In Collaboration

Frequently, companies gain better paths to innovation, collaboration and competitiveness with the presence of business-technology hybrids who span departments and leverage cross-team expertise. The demands of innovation, meeting customer needs, and rapidly changing solution markets are challenging software companies to work much more quickly and collaboratively than ever before.

An important hybrid is the marketing technologist. Scott Brinker has published an extensive and well-crafted piece on the rise of the marketing technologist, describing “technology-powered marketing” where “Marketing must take ownership of the technology in its domain”. Some of Brinker’s observations on the marketing technologist hybrid:

As marketers, you’re already responsible for the outcomes based on such technology. The accountability so widely promoted in digital marketing has you in the hot seat for results. It’s only sensible that you should have full control over the means and mechanisms to deliver those results.

You must be the driver of marketing technology, not merely a concerned passenger. But if you don’t have technical depth, who can help you navigate? …I propose a new role in the marketing department: a marketing CTO or chief marketing technologist. The mission of the marketing CTO is to provide that technology navigation.

Brinker makes the case for highly functional collaborations between IT and Marketing:

..technology decisions and marketing strategy are intertwined. You can’t address one without impacting the other.

Brinker also profiles the ‘3 Spheres of Marketing Technology’: “All these technologies — the ones we buy, the ones we build upon — can be categorized into three overlapping spheres”:

Customer-Focused / Technology-Driven Marketing: Attract More Buyers

In 2008, Booz & Company published its view of the growing integration of marketing strategies with technology, “Not Your Typical Marketing Campaign – The Next Wave of Technology-Driven Marketing”:

Next-generation direct marketing demands a front-to-back rethink of the overall IT architecture, with the ultimate goal of better understanding the customer… In the past, each channel would feed customer information individually into the back-end customer relationship management (CRM) and enterprise resource planning (ERP) systems that processed transactions and held much of the customer data. Using the new architecture, all of those channels now connect to a central integrated engine. This engine, available throughout the network, mediates between channels and the customer data and back-end processing. The central campaign engine also contains the business rules that govern every interaction with every customer.

The single most critical innovation, however, lies in doing away with the typical siloed, channel-specific archi­tecture on which most current direct marketing and campaigning technol­ogy depends. No customer-centric marketing effort can be truly success­ful if the technology is still organized around interaction channels, rather than those all-important customers who naturally interact with the busi­ness through multiple channels.

Each step of the way will require the willingness to rethink your overall marketing strategy, the tactical processes by which you plan and carry out each campaign, and the IT tools you need. You must develop the skills required to design and execute analytic campaigns and, of course, you will need to build the technologies to enable those cam­paigns.

Most important, from begin­ning to end, the CIO and the CMO must work together as partners to design, build, and test the necessary infrastructure, and to expand it, step by step, throughout your company

Marketing Technology + IT: Marketing ERP?

Looking at the transition from channel silos to a more integrated marketing technology platform brings up the notion of Marketing “ERP” to provision, manage and analyze initiatives supported by marketing tech. Egbert Hendriks @ephendriks introduces this notion (whether seriously or tongue-in-cheek) in a recent exchange on Twitter with Kevin Cochrane @kevinc2003:

@ephendriks RT @niels_goossen: Why Marketing Should Run Its Own Technology — InformationWeek http://bit.ly/dRaLSs

@kevinc2003: @ephendriks what do you see as being a marketing “ERP”? Interested in your perspective / insights

From the Booz & Company paper: the diagram to the right below could suggest a path to a Marketing ERP platform. Also be sure to note the transition from channel silos on left, to a more integrated marketing technology platform on right.

BUT – at this point, the answer to building out highly effective marketing technology systems incorporating the best of Marketing and IT is not found in throwing more tech at the situation. Nor is creating a new software category going to help.

A better approach is the enablement and empowerment of IT and Marketing working as true collaborative partners, where upper management fully supports the elimination of silos and frees up IT to work on strategic initiatives. Software companies still have lots of people and process matters to figure out first. Innovate how the company works together as teams with common purpose. Collaboration culture can lead to and encourage innovation culture, both of which can lead to business success and competitive agility.